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REDMOND, Wash. — October 24, 2013 — Microsoft Corp. today announced revenue of $18.53 billion for the quarter ended September 30, 2013. Gross margin, operating income, net income, and diluted earnings per share for the quarter were $13.42 billion, $6.33 billion, $5.24 billion, and $0.62 per share.

These financial results reflect the deferral of $113 million of revenue primarily related to Windows 8.1 Pre-sales. All growth comparisons in the press release relate to the corresponding period in the last fiscal year, unless otherwise noted.

The following table reconciles these financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. We have provided this non-GAAP financial information to aid investors in better understanding the company’s performance.

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“Our devices and services transformation is progressing and we are launching a wide range of compelling products and experiences this fall for both business and consumers,” said Steve Ballmer, chief executive officer at Microsoft. “Our new commercial services will help us continue to outgrow the enterprise market, and we are seeing lots of consumer excitement for Xbox One, Surface 2 and Surface Pro 2, and the full spectrum of Windows 8.1 and Windows Phone devices.”

“We saw strong focus across our teams, generating record first-quarter revenue even as we navigate a fundamental business transition. Our enterprise renewals were very healthy and our devices and consumer business continued to improve,” said Amy Hood, chief financial officer at Microsoft. “We are making strategic investments in areas like technological innovation, supply chain management, and global cloud operations to build for the future and create long-term shareholder value.”

Devices and Consumer revenue grew 4% to $7.46 billion.

• Windows OEM revenue declined 7%; Windows Pro revenue grew for the second consecutive quarter.

• Surface revenue grew to $400 million with sequential growth in revenue and units sold over the prior quarter.

• Search advertising revenue grew 47% driven by an increase in revenue per search and volume.

Commercial revenue grew 10% to $11.20 billion.

• SQL Server revenue grew double-digits, with SQL Server Premium revenue growing more than 30%.

• Lync, SharePoint, and Exchange, our productivity server offerings, collectively grew double-digits.

• Commercial cloud revenue grew 103%.

“We continue to execute well across our businesses and we are seeing robust demand for our enterprise products and cloud services. Strong customer adoption of Office 365, Azure, and Dynamics CRM Online is accelerating our business transition to the cloud,” said Kevin Turner, chief operating officer at Microsoft. “Our investments in SQL database platform, Hyper-V, System Center, and Lync are driving market share gains as these comprehensive solutions enable customers to increase their insight and efficiency.”

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast detailed below.

Webcast Details

Amy Hood, executive vice president and chief financial officer, Frank Brod, chief accounting officer, and Chris Suh, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. PDT (5:30 p.m. EDT) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/investor/. The webcast will be available for replay through the close of business on October 24, 2014.

Adjusted Financial Results and Non-GAAP Measures

For the first quarter of fiscal year 2014, GAAP revenue, operating income, and diluted earnings per share included the deferral of $113 million of revenue primarily related to Windows 8.1 Pre-sales. During the first quarter of fiscal year 2013, GAAP revenue, operating income, and diluted earnings per share included the deferral of $1.4 billion of revenue related to the Windows Upgrade Offer, Windows 8 Pre-sales, and Office Offer. These items are defined below. In addition to these financial results reported in accordance with GAAP, we have provided certain non-GAAP financial information to aid investors in better understanding the company’s performance. Presenting these measures without the impact of these items gives additional insight into operational performance and helps clarify trends affecting the company’s business. For comparability of reporting, management considers this information in conjunction with GAAP amounts in evaluating business performance. These non-GAAP financial measures should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Non-GAAP Definitions

Revenue deferred on Pre-sales of Windows 8.1 to original equipment manufacturers and retailers before general availability (“Windows 8.1 Pre-sales”).

Revenue deferred on sales of Windows 7 with an option to upgrade to Windows 8 Pro at a discounted price (the “Windows Upgrade Offer”) and Pre-sales of Windows 8 to OEMs and retailers before general availability.

Revenue deferred on sales of the previous version of the Microsoft Office system, with a guarantee to be upgraded to the new Office at minimal or no cost (the “Office Upgrade Offer”) and Pre-sales of the new Office to OEMs and retailers before general availability (collectively, the “Office Offer”).

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

• intense competition in all of Microsoft’s markets;

• increasing focus on services presents execution and competitive risks;

• significant investments in new products and services that may not be profitable;

• acquisitions, joint ventures, and strategic alliances, including our acquisition of Nokia’s Devices and Services business, may have an adverse effect on our business;

• Microsoft’s continued ability to protect its intellectual property rights;

• claims that Microsoft has infringed the intellectual property rights of others;

• the possibility of unauthorized disclosure of significant portions of Microsoft’s source code;

• cyber-attacks and security vulnerabilities in Microsoft products that could reduce revenue or lead to liability;

• improper disclosure of personal data that could result in liability and harm to Microsoft’s reputation;

• outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure;

• government litigation and regulation that may limit how Microsoft designs and markets its products;

• Microsoft’s ability to attract and retain talented employees;

• delays in product development and related product release schedules;

• adverse economic or market conditions my harm our business;

• adverse results in legal disputes;

• unanticipated tax liabilities;

• our hardware and software products may experience quality or supply problems;

• impairment of goodwill or amortizable intangible assets causing a charge to earnings;

• exposure to increased economic and regulatory uncertainties from operating a global business; and

• catastrophic events or geo-political conditions may disrupt our business.

For further information regarding risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/investor/.

All information in this release is as of October 24, 2013. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

For more information, financial analysts and investors only:

Chris Suh, general manager, Investor Relations, (425) 706-4400

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news/. Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. PDT conference call with investors and analysts, is available at http://www.microsoft.com/investor/.

NAIROBI , Kenya — Oct . 2 4 , 2013 — While attending DEMO Africa, Microsoft Corp. on Thursday announced strategic cooperation agreements with three incubator organizations across the African continent to enable startups, innovators and Africa’s developer community to grow their skills and build businesses with Microsoft technologies. Under the recently launched Microsoft 4Afrika Initiative, Microsoft has entered into agreements with CcHUB in Nigeria, DTBi in Tanzania and AfriLabs, the pan-African hub network.

The cooperation aims to offer the communities working in these hubs increased access to software, skills development opportunities and a means through which innovative startups can access capital investment, benefit from international outreach and scale their businesses to the world through Microsoft’s cloud computing solutions.

The Co-Creation Hub, or CcHUB as it is commonly known, is Nigeria’s first innovation lab and pre-incubation space designed to catalyze creative social technology ventures. It is a place for technologists, social entrepreneurs, government and investors in and around Lagos to co-create new solutions to address business opportunities and social needs in Nigeria.

The Dar Teknohama Business Incubator, commonly known as DTBi, is a registered and autonomous entity established by the Tanzanian Commission for Science and Technology to promote information and communication technology (ICT) innovation and entrepreneurship, contributing to job creation and enhanced economic health in Tanzania.

AfriLabs is a network organization that connects incubator hubs across the continent in order to promote the growth and development of the African technology sector. AfriLabs has 20 member organizations in Cameroon, Egypt, Ethiopia, Ghana, Kenya, Liberia, Madagascar, Nigeria, Senegal, South Africa, Uganda and Zambia.

Microsoft will work with each organization to:

• Support the startup community with Microsoft BizSpark memberships and access to business networking and capital investment opportunities. BizSpark is a global program that helps startups grow into successful businesses through software support and a vibrant ecosystem that delivers exceptional business advantage.
  

• Enable developers to access the latest events and workshops on Microsoft’s newest development technologies through relevant community events.
  

• Provide Microsoft devices, including Windows Phones and Windows-based tablets, for testing applications and other software developed by the local IT communities.
  

• Enable them to benefit from the 4Afrika Internship program, which will provide them access to the pool of talent graduating as 4Afrika interns as potential hires for their own facilities.
  

• Enable them to benefit from the 4Afrika Volunteer program, which will provide them with access to the pool of Microsoft employees volunteering in Africa as visiting trainers and mentors at their own facilities.
  

In addition, the partnership with AfriLabs will support the development of sustainable and scalable working environments across the continent, such as technology hubs and incubation centers, to stimulate entrepreneurship and support African startups. Microsoft will work with AfriLabs to help startups working in these hubs become successful technology companies driving innovation, employability, competitiveness and growth in Africa.

Mteto Nyati, vice chair of the 4Afrika Advisory Council and managing director of Microsoft South Africa, will speak at DEMO Africa this week. In advance of the event, he said, “Microsoft sees boundless potential in African youth, developers and entrepreneurs, and we view the collaborative efforts with these innovation hubs across the continent as strategic and crucial opportunities for us to extend our support to their ecosystems. Through the 4Afrika Initiative, we are deeply committed to helping accelerate African innovation, and we hope these efforts will help us reach more people who are looking to turn their great ideas into a reality that can empower their community, their country and Africa at large.”

The Microsoft 4Afrika Initiative is designed to help Africa improve its global competitiveness. By 2016, various 4Afrika efforts spanning the continent, such as these new collaborations, will help place tens of millions of smart devices in the hands of African youth, bring 1 million African small and medium-size enterprises online, upskill 100,000 members of Africa’s existing workforce, and help an additional 100,000 recent graduates develop skills for employability, 75 percent of which Microsoft will help place in jobs.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.